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Facts
An assessment order under Section 143(3) was passed for AY 2017-18, determining the assessee's income. The PCIT subsequently invoked Section 263, finding the assessment order erroneous and prejudicial to the revenue, and set it aside, directing a fresh assessment. The assessee's appeal to the Tribunal involved a 350-day delay, which was condoned due to the death of a partner.
Held
The Tribunal found that the PCIT passed an ex-parte order under Section 263 without affording the assessee an adequate opportunity of being heard, despite notices being issued. To ensure substantial justice and a decision on merits, the Tribunal remanded the matter back to the PCIT for de-novo adjudication, instructing the assessee to cooperate.
Key Issues
Whether the PCIT's ex-parte order under Section 263, passed without providing the assessee an opportunity of being heard, was sustainable, and whether the matter should be remanded for fresh adjudication.
Sections Cited
Section 143(3), Section 263, Explanation 2(a) to Section 263
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Income Tax Appellate Tribunal, DELHI BENCH’ G’: NEW DELHI
ORDER PER YOGESH KUMAR U.S., JM:
This appeal filed by the assessee against the order of Learned Principal Commissioner of Income Tax (Appeals)- Braeilly [“Ld.
PCIT”, for short], dated 04/03/2022 for Assessment Year 2017-18.
Shree Roshan Cold Storage 2. There is a delay of 350 days in filing the present Appeal and an application for condonation of delay has been filed by the Assessee stating that one of the partners of the Assessee firm was suffering from illness of cancer and expired on 28/09/2022 and the impugned order of the PCIT was kept by the deceased which was not known to the other partner, therefore, could file the Appeal before the Tribunal within the period of limitation provided under the Act, therefore, sought for condonation of the delay. For the reasons stated in the application filed by the Assessee for condonation of delay, the delay of 350 days in filing the present Appeal is condoned.
Brief facts of the case are that, an order u/s 143(3) came to be passed on 30/12/2019 by computing the income of the Assessee at Rs. 11,83,611/- as against returned income of Rs. 9,58,149/-. The Ld. PCIT has exercised the power conferred u/s 263 of the Income Tax Act, 1961 (‘Act’ for short) and of the opinion that the assessment order dated 30/12/2019 passed u/s 143(3) of the Act is erroneous, in so far as prejudicial to the interest of the Revenue as per Explanation 2(a) to Section 263 of the Act, accordingly vide
Shree Roshan Cold Storage order dated 04/03/2022 set aside the assessment order and directed the A.O. to frame fresh assessment by keeping in view of the observation made by the Ld. PCIT, which is under challenge by the Assessee in the present Appeal.
The Ld. Counsel for the Assessee submitted that the Ld. PCIT passed ex-parte order impugned wherein the Assessee has not been provided opportunity of being heard, therefore, sought for remanding the matter to the file of PCIT for fresh consideration.
Per contra, the Departmental Representative submitted that the Assessee has been provided with sufficient opportunities which have not been utilized by the Assessee and further by relying on the findings and the conclusion of the order impugned, the Departmental Representative sought for dismissal of the Appeal filed by the Assessee.
We have heard the parties perused the material available on record. During the proceedings u/s 263 of the Act the Ld. PCIT has issued notice on 02/02/2022 and 12/02/2022 fixing the case on 11/02/2022 and 22/02/2022 respectively. However, no compliance has been made by the Assessee to both the notices and Shree Roshan Cold Storage no reply/submission made by the Assessee, therefore, the Ld. PCIT passed an ex-parte order by setting aside the assessment order and directed the A.O. to frame the de-novo assessment. On going through the order of the PCIT, it is found that the Ld. PCIT has not decided the issued on merit and passed the order impugned without hearing the Assessee. In our considered opinion, if an opportunity of being heard given to the Assessee and decide the issue on merit by the Ld. PCIT, substantial justice would be rendered. Accordingly, we remand the issue to the file of the PCIT for de-novo adjudication with a direction to the Assessee to fully co- operate with the proceedings before the Ld. PCIT.
In the result, Appeal of the Assessee is partly allowed for statistical purpose.